A broadly diversified portfolio with a cautious risk profile and strong historical performance

Report created on May 31, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of ETFs with a significant 38% allocation to the iShares Core S&P 500 UCITS ETF. This is complemented by European and emerging market ETFs, providing a well-rounded exposure to global equities. The portfolio's structure is aligned with common benchmarks, emphasizing large-cap stocks while maintaining a diversified approach. This composition supports a balance between growth and stability, suitable for investors seeking moderate risk exposure. To enhance diversification, consider adding fixed income or alternative assets, which could provide a buffer during equity market downturns.

Growth Info

Historically, the portfolio has delivered an impressive compound annual growth rate (CAGR) of 18.75%, significantly outperforming typical market indices. This strong performance, coupled with a maximum drawdown of just -9.68%, indicates robust risk management and resilience during market fluctuations. While past performance is not indicative of future results, these metrics suggest a well-constructed portfolio. To maintain this trajectory, continue monitoring market conditions and consider periodic rebalancing to align with evolving economic trends.

Projection Info

The forward projection utilizes Monte Carlo simulations, which model potential future outcomes based on historical data. With a median projected return of 1,196.06% and all simulations yielding positive returns, the outlook is optimistic. However, it's crucial to remember that these projections are hypothetical and subject to market volatility. To prepare for various scenarios, consider stress-testing the portfolio under different economic conditions. This approach can help identify potential risks and opportunities, ensuring preparedness for unexpected market shifts.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.76% of assets in equities. This concentration offers growth potential but also exposes the portfolio to market volatility. Compared to benchmarks, this allocation is aggressive for a cautious profile. Introducing more asset classes, such as bonds or real estate, could mitigate risk and enhance stability. Diversifying across asset classes can provide smoother returns over time, reducing the impact of any single market downturn.

Sectors Info

  • Technology
    35%
  • Consumer Discretionary
    14%
  • Financials
    12%
  • Industrials
    9%
  • Health Care
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    1%

Technology dominates the sector allocation at 35.38%, reflecting a strong bias towards growth-oriented industries. While this has driven past performance, it may increase vulnerability to sector-specific risks, such as regulatory changes or technological disruptions. To balance this, consider diversifying into underrepresented sectors like utilities or consumer defensives. This strategy can reduce volatility and provide a more stable income stream, particularly during economic downturns.

Regions Info

  • North America
    61%
  • Europe Developed
    20%
  • Asia Emerging
    10%
  • Asia Developed
    5%
  • Africa/Middle East
    2%
  • Japan
    1%
  • Latin America
    1%

The geographic allocation is skewed towards North America, which accounts for 60.63% of the portfolio. While this aligns with global benchmarks, it may limit exposure to growth opportunities in emerging markets. European and Asian markets offer diversification benefits and potential for higher returns. To capitalize on global economic trends, consider increasing allocations to these regions. This can enhance the portfolio's resilience against region-specific economic challenges.

Redundant positions Info

  • iShares NASDAQ 100 UCITS ETF USD (Acc)
    Xtrackers MSCI World Information Technology UCITS ETF 1C
    High correlation

The portfolio contains highly correlated assets, particularly between the iShares NASDAQ 100 and Xtrackers MSCI World Information Technology ETFs. High correlation can reduce diversification benefits, as these assets may move in tandem during market downturns. To improve risk management, consider replacing one of these ETFs with a less correlated asset. This adjustment can provide a more balanced risk-return profile, enhancing overall portfolio performance during volatile periods.

Risk vs. return

This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.

Click on the colored dots to explore allocations.

The portfolio could benefit from optimization using the Efficient Frontier, focusing on the best risk-return ratio. By adjusting allocations among existing assets, you can potentially achieve a more efficient portfolio. This process involves finding the optimal balance between risk and return, ensuring that each asset contributes effectively to the portfolio's overall performance. Consider consulting with a financial advisor to explore optimization strategies tailored to your specific goals and risk tolerance.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • Amundi Stoxx Europe 600 UCITS ETF C EUR 0.07%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • Xtrackers MSCI World Information Technology UCITS ETF 1C 0.25%
  • Weighted costs total (per year) 0.15%

With a total expense ratio (TER) of 0.15%, the portfolio is cost-efficient compared to industry averages. Low costs are crucial for long-term performance, as they enhance net returns. This efficiency aligns well with best practices, ensuring more of your investment grows over time. To maintain cost-effectiveness, periodically review and compare fees of current holdings with alternatives. Opting for lower-cost options without sacrificing quality can further boost overall returns.

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